3 Reasons for Online Agencies to Do Traveler Background Checks

The online travel industry started in the mid-1990s, when a number of travel agencies launched their platforms in the US as a way to increase the volume of new customers. More than two decades later, the action of booking accommodations for the next family trip and buying flight tickets on any device made this industry worth nearly $750 billion in 2019, according to a report by Research and Markets at the end of 2020. Despite the crisis provoked by the pandemic in the last year, the industry is expected to recover and post growth of 14.8 percent, reaching $900 billion, by 2023.

Sadly, with the evolution of an industry, new challenges appear that can hinder success, and the online travel industry is no exception. Anti-money laundering (AML) and know your customer (KYC) have become the bibles for the companies that want to protect the safety of their customers and their own reputation in this competitive environment.

Why are AML and KYC so important? The answer is in the numerous cases of houses, hotels and hostels used by criminals. In fact, it is common to find forums on the internet from owners of different types of accommodations who ended up renting their places to people who robbed them, or used the premises to commit some crime.

Here are three reasons why I believe it is imperative for any company dedicated to the online travel industry to do background checks before confirming any booking.

1. Customer safety: Just in 2020, Truora conducted background checks on 2 million people from different countries, of which at least 20 percent included a risk indicator. The possibilities for a company in the travel industry to be part of a criminal band are always there and in 2021 this number has been increasing in Latin America because of the employment crisis caused by the pandemic.
2. Reputation: The online travel industry is mainly based on reputation. Customers will make their decisions after reading the feedback from previous clients, and the worst-case scenario is a story of a crime committed under the company name and spread all over the internet.
3. Committing to crime prevention: By the end of 2020, Truora had discovered more than 20,000 profiles related exclusively to money laundering crimes. According to a report by the United Nations on drugs and crimes last year, “The recession caused by COVID-19 has a direct impact on the risk of human trafficking, mainly due to the increase in the population with economic needs derived from the increase in unemployment.” Preventing this depends on the level of the industry’s commitment. Additionally, with the new modalities of accommodation — couch surfing, house sharing, room renting — the need to protect both the property, owner and the traveler increase. The risk is higher when you are a two-sided marketplace that is providing a service to two complete strangers. Both of them expect the best level of safety possible, and guaranteeing that is the key to keeping the industry going.

Despite the fact that background checks are the easiest way to prevent criminals with public records from getting involved with the online travel industry, the collaboration between the ecosystem and country authorities is also vital in the fight against crimes that may be happening right now and can be stopped.